BREATHING new life into the economy while developing a sustainable environment is top of the Welsh Assembly Government's agenda.

Trees dominate many parts of the Welsh landscape, and I am determined to use the Assembly's influence to maxim-ise the benefits of this vast resource.

The fact that the Assembly owns 40% of the forests of Wales, which the Forestry Commission maintain for us, gives us an excellent opportunity to do just that.

Our woods contribute to sustainable development and rural regeneration - cornerstones of the Assembly's objectives.

As well as providing homes for wildlife they are havens of tranquillity which nevertheless contribute about &#xA3;400m to the Welsh economy every year.

The Assembly has put its money where its mouth is, funding woodland initiatives with hard cash and unlocking further millions of European money.

This is helping the Forestry Commission, with its partners, to deliver our policies.

With the approval, in January, of the flagship community project, Cydcoed II, funding for the woodlands in Wales from Objective 1 and 3 now exceeds &#xA3;23.9m.

Over the past 18 months, Cydcoed - Woods for All has promised nearly &#xA3;4m to community groups.

Over the past six months, over &#xA3;60,000 a week has been handed direct to community groups. This helps to provide jobs, create new "green spaces", and benefit the communities in some of the most deprived areas of Wales, from Anglesey to the South Wales Valleys.

Building on this, Cydcoed II will be bigger and better, with more than &#xA3;13m working for communities over the next six years.

I have also been keen to establish closer links between forestry and agriculture.

The Shelterwoods project offers grants to farmers for planting new, well-designed shelter woodlands into their farms and improving the environment.

Forestry in Wales is a multi-million pound industry, but like agriculture it is facing changing markets for its timber, falling prices and a need for significant change.

I have recently initiated the development of a capital grant scheme for public buildings to change their existing oil and gas heating to wood fuel and biomass, so reducing CO&#xB2; emissions and ensuring money spent on the provision of heat stays in the local area.

The Forestry Commission is also linking new private woodland management plans to the payment of grants, easing the way for owners to secure certification under the internationally accepted Forestry Stewardship Council standard which guarantees that management is sustainable.

Furthermore, the Commission, with the WDA, is working with businesses to help small firms to add value to Welsh timber and sell it into niche markets.

Our woodlands make a contribution to the rural economy through world-class recreation facilities.

The mountain-bike trails at Coed-y-Brenin, near Dolgellau - just one of a number of such trails - bring in several million pounds every year to the local economy.

Tourism is one of our biggest industries, and attractive sustainable woodlands may have as much to offer our economy in this as they do in timber production.

All our plans for woodland in Wales follow a broad, agreed strategy and I have a Woodland Forum, drawn from a wide coalition of interests, to advise me.

As part of this I have already asked for a hard look at ways in which we can more quickly develop varied mixed woodland, rather than the single species coniferous planting of the past.

We are also moving towards having fewer ugly large-scale fellings.

In half our forests the trees will be thinned out over time to create a new kind of woodland with mixed trees of different sizes.

Of course, all these decisions now genuinely involve local communities in discussing the future of their local Assembly woodlands.

All these initiatives show the huge range of benefits being delivered from our woodlands, and the important contribution they can make to our rural economy.